It’s been a milestone year for Southeast Asia, not just in terms of additional dry powder, but also for gender diversity in the venture capital world.
The region is seeing an emergence of female-led initiatives to tackle the gender funding gap, especially with the launch of The Billion Dollar Fund for Women (TBDF) in October.
Looking back at 2018, Malaysia and China-based Gobi Partners’ venture partner Shannon Kalayanamitr commented that it has been “quite a year” for women in tech, be it on the entrepreneur side or the VC side itself.
“I have personally seen alongside my fellow peers – an uptick in women entrepreneurs and founders that are now participating in more accelerators, demo days, and doing their own [fund] raising. At dtac Accelerate Batch 6 this year, 1/3 of the competing startups had a female founder! And of those, two out of the top three winners were women-led startups – Ooca (mental health app) and Somjai HomeLoan (fintech),” she told DEALSTREETASIA.
Kalayanamitr also believes that fundraising has gotten a bit easier since there are now more avenues for women when pursuing capital raise.
“The avenues have finally levelled up and are now MORE than just the token ‘women in tech’ panels at conferences – and become more in-depth with valuable content and business workshops, such as the recent dinner Monthida McCoole (former investment partner at Cocoon Capital), organised – a Female Founders Day (with over 60 women attendees) as well as a Women’s CVC/ VC dinner for approximately 25 women VCs in Thailand alone!
“Thus, in terms of enabling women pathways to start up excellence, whether it be know-how or fundraising, we have definitely seen a big improvement, though in terms of conversion to actual funding – we haven’t seen too many to date yet,” she said, adding that there is hope, thanks to the TBDF initiative.
TBDF is a new global consortium led by managing partners Shelly Porges and Sarah Chen and co-founders Anousheh Ansari, Nadereh Chamlou and Anu Jain to address the gender funding gap is seeking to mobilise as much as $1 billion to invest in women-founded companies within the next decade. Gobi Partners has pledged to invest $50 million in women-founded startups by 2020. It said it has so far invested about $30 million in such startups in sectors including agtech, e-commerce, fintech and property management.
Meanwhile, TBDF’s Chen said that some of the key trends the industry has seen is the birth of first-time funds, and brand-name funds with women at the forefront from Backstage Capital championing under-represented communities in the US to Heather Henyon who leads Mindshift Capital, a venture fund investing in women-led technology startup companies with a focus on the Middle East, and Gobi Partners’ Kalayanamitr championing women founders innovating across Southeast Asia.
“Recall that historically, part of the problem is where VC dollars come from – 75 per cent of US VC dollars come from institutional investors – limited partners who are university endowments, pension funds, foundations, financial institutions. As you would expect, they carry with them a conservative investment mandate, which means that they tend to invest in the same well-known venture funds, that are 99 per cent led by men.
“And thus the conundrum – until we have more gender diverse-led funds and support them, the cycle repeats itself, and the financial opportunity of investing into women-founded companies is also lost. I’m hopeful that these LPs are now making ‘investing in diversity’ a strategic step,” she said.
Interestingly, citing a report by Accenture, Chen added that $30 trillion in assets will be passed from baby boomers to their heirs in the US over the next 30 to 40 years where women will be the primary beneficiaries. This will result in female clients demanding investment opportunities in public companies that are committed to delivering on environmental, social and governance (ESG) goals.
In addition, younger, more diverse high net-worth investors are interested in early-stage and private investments, especially when those companies have diverse founders, she added.
Things a-changing, thanks to #metoo
Chen also noted that on the VC front, it is interesting to see how the #metoo movement has really created change within the industry.
“For the first time, there are real consequences and firms are extremely aware of the environment they need to protect for the success of their firms. LPs are now taking a stronger stand in where they put their money, and founders too, through efforts like Founders for Change are being selective about where they are sourcing money from. Since March, top-tier firms such as Andreessen Horowitz (hired three!), Greylock, Bain, Felicis, Menlo and Redpoint have hired women partners and many others are following suit,” she said.
Networks such as All Raise and a global directory of women in VC – an effort led by MDC Ventures’ Jessica Peltz-Zatulove and Female Founders Fund’s Sutian Dong that now includes 625 women VCs across 15 countries and 400 funds – are helping women investors connect and collaborate on deal flows, talent pipeline and mentorship opportunities.
“These networks are critical to continue to drive career development and diversity within the venture community. And so the theme for this year would be change, but more importantly that strong, qualified women are acting upon it and leading the charge,” Chen added.
What’s ahead of 2019
In a very optimistic note after speaking to industry players and doing a pulse check on the ecosystem, Kalayanamitr believes that 2019 will be a better year for female founders.
“My pipeline is full of women founders and there will be many opportunities for co-investments. Thailand, Indonesia and Vietnam are coming up strong with women founders and we are even seeing a few from Myanmar and Cambodia.
“As for Gobi, we have long invested in women, in fact 1/3 of our current portfolio are already women founders and we aim to keep serving this underserved market. As said by [Gobi Partners’ founding partner] Thomas Tsao: ‘For women to be in startup, let alone a founder – they are already fighters, multitaskers and rockstars – thus, we know that they are top of their game.‘ We aim to help those women bring their vision to fruition,” she said.
TBDF, meanwhile, is already looking past the $1-billion funding goal.
“TBDF will continue our work across the globe – beyond reaching the One Billion Dollar goal and expanding our global reach with our venture fund partners, our priority has always been to better support our partner funds and their continued capacity to invest in women-founded companies.
“We will do this in four steps: connecting with prospective LPs, bringing LPs together with fund managers at unique roundtables, partnering with wealth management organisations and most exciting of all perhaps is, launching a global success stories campaign – from GPs and women founded companies, which will help to accelerate the agenda as a whole!” said Chen.